A Smart and Green Future for Taiwan’s Manufacturing Sector
Ranking sixth in world exports, employing nearly 2.7 million people and representing by far the largest share of the country’s industry, Taiwan’s manufacturing sector is among the most notorious successes of the past few decades.
Through product quality, a comprehensive supply chain and a fully integrated industrial sector, the “made in Taiwan” label has become a synonym of reliability, and specifically in the areas of machine tools, industrial materials and plastics and rubber machinery, it has carved itself a place among the world’s top producers.
In the face of difficulty, such as the decline in exports to China in recent years, Taiwan’s industry has been able not only to stem the tide, but to adapt, to innovate and to grow. Such an achievement has been the result of a joint effort of companies, research centers and government policies that have stimulated the industry towards becoming smart and green. Through focusing on smart machinery and automated factories, companies such as HIWIN have begun to turn Taiwanese industrial clusters into “smart machine metropoles”, while the parallel advances of engineering companies and manufacturers such as Paul Wurth and Novatec on energy-saving technologies and “green” materials, have brought the sector closer to achieving a “win-win” situation for both environmental protection and economic development.
HIWIN
Established in 1989, in Taichung, Taiwan, as a manufacturer of ball screws and linear motor components, HIWIN has grown in the past decades to become one of the most successful competitors in its industry. Today, through technological dexterity and business expertise, HIWIN has not only managed to develop and include in its repertoire an altogether new product category, that of auto control systems, but more importantly to become the only company of its kind to offer total solutions, while competitors still specialize in one or a few particular mechanisms, and cannot therefore offer their customers but a limited array of options.
According to HIWIN Founder and Chairman Mr. Eric Chuo, their success is largely based on their willingness to push the barriers of innovation. “We do not only carry out research in Taiwan, but in many other countries as well, so that we can then integrate different resources from different technologies around the world”. In fact, HIWIN works in partnership with research centers in Israel, Russia and Germany, where they also work alongside six different universities on the development of new products. The R&D system (research and development), says Mr. Chuo, allows them to draw knowledge and experience from all these multiple sources.
With subsidiaries all over the world, HIWIN must coordinate its efforts carefully, while at the same time keeping customers well informed about available products and applications. “Educating the market about our products is essential for promoting our company and showing them all we can do” says Mr. Chuo, whose company was recently involved in a spaceship mission to Mars in which HIWIN linear motor pieces were used, and in which a 3D printer, installed in the spaceship, was programmed to reproduce the pieces in case of an emergency. “When you are in a spaceship and something goes wrong, you cannot ask for replacements right away”, says Mr. Chuo with a smile.
But HIWIN also has ambitious plans and projects here in Planet Earth, starting with the completion, projected for the end of this year, of their factory in Chicago, which will allow them to expand onto different product categories, specifically in automation. This move is particularly strategic considering that most of the manufacturing processes of American companies are not located in the US, and are thus not fully automated. With an expected increase of two digits in the following years, in a market which is still to be fully exploited, HAIWAN’s bid to make American companies more competitive could be nothing short of groundbreaking. “The USA needs our products”, says Mr. Chuo with confidence.
In fact, HIWIN’s expansion into Chicago, which includes the development of one of the most advanced warehousing facilities available with more than 110 thousand square feet over a 15-acre area, is part of a larger incursion strategy into the American market, which involves not only supplying the local industry with high quality technology, but also participating directly in the production chain, through partnerships and collaborations. “We are always open to proper opportunities for partnership in the US”, explains Mr. Chuo. “If we find the opportunity to acquire a company, for example, we would be very willing to do it, as a synergy could be tremendously important”.
But their business strategy would not be complete without a parallel effort to educate the market about the possibilities allowed for by HIWIN’s exhaustive range of options. “America needs to know that there are many products that could be manufactured here, making their companies more automated”, insists Mr. Chuo. Accordingly, HIWIN has been tremendously active in recent years in their outreach campaign, participating in more than 20 events per year in the US and in more than 200 worldwide. Their idea is to make the most of a long-standing history of cooperation between the two countries, particularly with the state of California, which Taiwanese people have frequented for years in order to receive degrees in higher education. “We know about a lot of Taiwanese people living and working in the USA who are thus constantly enriching dialogue and collaboration between the industries, universities and research centers of both countries”, explains Mr. Chuo.
At a global level, HIWIN is also aware of the opportunities allowed for by Taiwan’s strategic position in both the geography and economy of Asia, which could open the door to many future partnerships. “We know, for example, that there is a lot of equipment manufactured in the US and brought to Asia, as is the case with some parts for Samsung in Korea”, explains Mr. Chuo, “and HIWIN could play an important role setting its engineering capabilities to repair the equipment when needed”.
By focusing on companies that are looking to upgrade their technologies, and relying on their ability to integrate knowledge and developments from around the world while at the same time customizing their products to fit the varying needs of customers, Mr. Chuo is confident HIWIN will have a very promising future in the industry. “Our added value is that we can automate all the units required”, he says with pride, “we don’t just sell the machine”.
Paul Wurth
For international engineering company Paul Wurth, pioneers of the steel industry for nearly 150 years, establishing an international branch in Taiwan has been among its most audacious but also most rewarding challenges. “When we started here”, remembers Managing Director Rene Stoltz, “it was not easy to convince local people and companies to cooperate with us, as we were a foreign company. We had to build relationships from scratch in order to gain people’s trust, but once you gain their trust the rest comes easy”. Today, having not only gained a strong foothold in the country but indisputably leading the steel making industry, Paul Wurth enjoys partnerships and collabora-
TAIWAN’S INDUSTRY HAS BEEN ABLE NOT only to stem the tide, but to adapt, to innovate and to grow.
tions with customers and suppliers which account for their impeccable reputation.
But the road is ripe with fresh challenges, which today come mainly from neighboring China. “Our competitors, here in Taiwan and in the South Asia Region”, explains Mr. Stoltz, “come from China. Chinese companies can supply products with prices we will never reach, as even when buying in China we are charged different prices, and big Chinese companies can really cover all the shops”. Not being able to compete in prices Paul Wurth has focused on offering something far more valuable: a much wider multiple-solution portfolio, a foolproof quality of products and an unflinching reliability. In this way they have managed not only to survive in the market, but to be recognized for their higher quality, to a point where even customers of Chinese products often demand their equipment to be complemented with specific parts from Paul Wurth. For this reason, they have begun to partner with Chinese companies in order to unite forces and replace competition with collaboration. “This is the strength of our company”, concludes Mr. Stoltz.
A more delicate threat is certainly that of energy. Controlled by Chinese industries, coal prices have seen rises of 200 to 300% in recent years, which have led the steel industry to struggle. In such a pressing climate Paul Wurth is nevertheless confident to project a rise in revenues of 10 to 15% in the near future. The reason of such confidence is that the company began exploring energy alternatives long before they were even talked about in Taiwan, and they are now far ahead of their competitors on this subject. With many ongoing energy-saving projects, such as waste-transformation for steel plants, emission-reducing facilities and numerous programs of environmental responsibility, Paul Wurth has been able to offer products and services that meet new legal requirements for energy-saving and has thus been able to enter important markets in Asia, particularly in Vietnam. “By next year”, explains Mr. Stoltz, “we will be largely investing on energy saving, and attempting to enter new markets such as Myanmar, Laos and Cambodia”.
But the company is also exploring their expansion further overseas, particularly into the US. With an operation already running in Pittsburg, and a steady relationship manufacturing plants both in Taiwan and in their Shanghai shop to export to the US, Paul Wurth is nevertheless aware that there are plenty opportunities for expansion. “The US is importing more steel from China than from Taiwan, but Taiwan could largely raise exporting numbers by focusing not on raw material but on machinery”, explains Mr. Stoltz. The key, he concludes, is to take advantage of Taiwan’s strategic position in the region and the country’s positive business environment, in order to open the door for American companies. “In the logistics sector, for example”, explains Mr. Stoltz, “I can see American companies having distribution centers here”. In order to achieve such broad goals, Mr. Stoltz is certain the company must preserve its image and its marketing strategy, but particularly its ability to adapt to global challenges, its commitment to the environment, and to “helping make the world a better place”.
Novatecwheels
Novatecwheels is a premium product line for bicycle parts manufactured by Joy Industrial Co., in Taichung City, Taiwan. Founded in 1989, Novatecwheels began supplying the domestic market, but soon its high quality products and its innovative techniques outgrew the boundaries of the country, and today Novatecwheels has bicycles strolling all around the world. “The beginning of our name is Nova, says chief marketing officer Jeff Chen, “and it stands for a new beginning, as we are always trying to add new technologies to our bicycles”.
In fact, innovation has blatantly been the key factor in Novatecwheels’ international success as a major bicycle parts manufacturer. They were the first ones in Taiwan to use cold forging technology, making use of new materials ranging from steel to cold forged aluminum, a move that granted them access to new markets and to competing in the higher ranges of the industry. “We always try to be different from our other competitors by finding new materials, ensuring top quality for our products and carrying out a strictly environmentally-friendly manufacturing process so users will be happy and comfortable with the brand”, explains Mr. Chen, whose company has a team dedicated to calculating carbon dioxide produced in manufacturing, and has been certified for environmental protection for the past four years.
Currently, Novatecwheels is focused on improving performance for sport-related activities, and has made great advances in strengthening materials to resist different kinds of impacts common to professional cycling. Through research and innovation, Mr. Chen believes Novatecwheels will be able to fulfill their goals for the near future, among which is expanding their operations in the US, with an office strategically placed in California (NOVATECH WHEELS US, INC, 41725 Elm Street, Suite 302, Murrieta, Ca 92562). “We have not yet covered all the territory in the US, and we definitely have the potential to grow more the market. Our main strategy to do so is to provide integral services such as product integration and after-service integration among others, having part of our Taiwanese company on call to take care of any problem, and that is why we keep in touch with distributors in the region, and we are definitely open to new partnerships world-wide”.
But in an industry in which global demand surpasses 1.2 billion, and a yearly demand of 20 million in the US alone, quality and innovation are not sufficient for staying ahead of competitors, if consumers and possible business partners are not constantly informed about the company’s fast-changing range of products. In this respect, Novatecwheels’ strategy has also proven tremendously successful. As most other companies, they rely on international trade shows to reach new markets, and have recently participated in the March Taipei Show and other major events in the US. But they have also chosen to use social media as a platform for branding, working with international and regional writers who know the subject and can thus get directly involved in the cycling environment. “When people use our products we are always eager to hear their thoughts or suggestions”, explains Mr. Chen with great honesty, “because that is where we find the inspiration that keeps us moving forward”
HIWIN’S EXPANSION INTO CHICAGO,
WHICH INCLUDES the development of one of the most advanced warehousing facilities available with more than 110 thousand square feet over a 15-acre area, is part of a larger incursion strategy into the American market.